The MSC program in Malaysia is a renowned status pursued by offices countrywide. It’s a great idea to rent an office that is MSC certified, but it’s also crucial to know what it entails. In this article, you’ll learn more about the stringent requirements to become an MSC-certified office.
MSC Status Requirement in Malaysia
MSC status, now known as Malaysia Digital (MD) Status, is a program that grants companies certain incentives, such as tax exemptions and freedom of ownership, to catalyse overall economic growth. To be eligible for MSC Status, companies must meet strict requirements and are subject to approval by the relevant authorities.
What is MSC/Malaysia Digital (MD) Status?
Since attaining independence, Malaysia has implemented several government policies and incentives to catalyse economic growth and attract foreign investment. The MSC status is one such program, inaugurated in 1996 by the fourth Prime Minister Mahathir Mohamad as part of Malaysia’s 2020 Vision.
The program was spearheaded by MSC Malaysia and offered various attractive incentives, such as exemption from Malaysian income tax for 10 years and streamlined immigration of key workers. Since its implementation, there have been over 4,700 awarded companies generating a total of RM 653b total revenue and RM 430b total investment.
After 25 years in November 2021, MDEC revamped and rebranded the MSC Malaysia initiative into Malaysia Digital (MD) Status. The change saw a reworked framework and incentive packages better designed for modern economic conditions.
MSC/MD Status Eligibility Criteria
Companies intending to obtain the award of MSC/Malaysia Digital Status must meet the following criteria, as per MDEC Malaysia:
- Be incorporated under the Companies Act 2016 and resident in Malaysia
- Proposing to or is already carrying out one or more of the MSC Malaysia promoted activities
Ongoing Compliance Requirements
Companies must also comply with a set of conditions within 12 months of being awarded the MSC/Malaysia Digital Status.
- Companies must commence operations of one of the MD approved Activities in Malaysia (refer to section below).
- Companies must hire a minimum of 2 full-time employees (must be knowledge workers employed for the MD activities) with a minimum average monthly base salary of RM 5,000.
- Companies must have a minimum of RM 50,000 operating expenditure incurred for the MD activities.
- Companies must have a minimum of RM 1,000 in paid-up capital.
Full List of Malaysia Digital-Approved Activities
MDEC Malaysia has listed 20 activities that companies and its knowledge workers must engage in to be eligible for the MSC/MD Status. Below is the full list as per the latest guidelines provided from their official website:
- Artificial Intelligence (AI)
- Big Data Analytics (BDA)
- Blockchain
- Creative Media Technology
- Sharing Economy Platform
- Internet Of Things (IOT)
- Data Centre and Cloud (Technology/Software/Design and Support)
- Cybersecurity (Technology/Software/Design and Support)
- Drone Technology
- Financial Technology (FinTech)
- 3D Printing (Technology/Software/Design and Support)
- Autonomous (Technology/Software/Design and Support)
- Integrated Circuit (IC) Design and Embedded Software
- Robotics (Technology/Software/Design and Support)
- Systems/Network Architecture Design and Support
- User Interface and User Experience (UI/UX)
- Virtual, Augmented and/or Extended Reality
- Advance Telecommunication Technology
- Other Emerging Technologies Deemed Significant for the Digital Ecosystem Subject to Approval by the Approval Committee
- Global Business Services or Knowledge Process Outsourcing Excluding Non-Technical and/or Low Value Call Centre; and Recruitment Process Outsourcing.
Commencement Date of Exemption Period
The commencement date of the exemption period for MSC Status companies is the date on which the MSC Status approval letter is issued. The exemption period will last for a period of five years, subject to annual renewal.
Application Process for MSC Status
The application process for MSC Status involves several steps to ensure that companies meet the eligibility criteria and demonstrate their potential to contribute to Malaysia’s digital economy. The application process for MSC Status is as follows:
- Online Application: Create an account and complete the online application form within 30 working days.
- Preliminary Check: Upon acceptance of a complete application, MDEC will send an acknowledgement receipt registered email and review it for a preliminary check.
- Evaluation & Assessment: MDEC assigns a Business Analyst (BA) to evaluate the application, during which the applicant may have to provide additional information or present the proposed activities.
- Approval Committee Review: The evaluated application is presented to the Approval Committee for final review and approval.
MSC-Qualified Office Spaces in Malaysia
These MSC-status offices, strategically positioned across Malaysia’s burgeoning economic hubs, cater to the needs of multinational corporations and local businesses alike, providing a conducive environment for success:
Menara 1 Sentrum
Menara 1 Sentrum is a 27-story A-grade office building in Kuala Lumpur CBD with excellent connectivity to LRT and monorail. Close to amenities, LEED silver certified, GBI and MSC compliant.
Menara BT
Menara BT is a 20-storey premium grade A office tower located in Bangsar South, a vibrant and upscale neighbourhood in Kuala Lumpur. It is close to a variety of amenities, including restaurants, bars, cafes, and public transportation.
Key Takeaways
MSC Status is a coveted designation granted to eligible companies operating within the Malaysian digital economy, offers extensive financial perks and a competitive advantage. Acquiring it involves a straightforward application process, made even easier with PHB as your reliable partner. Connect with PHB today to discover more about MSC Status properties.
